Legislative Bargaining with Heterogeneous Disagreement Values: Theory and Experiments

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We study a legislative bargaining game in which failure to agree in a given round may result in a breakdown of negotiations. In that case, each player receives an exogenous 'disagreement value'. We characterize the set of stationary subgame perfect equilibria under all q-majority rules. Under unanimity rule, equilibrium payoffs are strictly increasing in disagreement values. Under all less-thanunanimity rules, expected payoffs are either decreasing or first increasing and then decreasing in disagreement values. We conduct experiments involving three players using majority and unanimity rule, finding support for these predictions. Terms of use: Documents in

The determinants of multilateral bargaining: a comprehensive analysis of Baron and Ferejohn majoritarian bargaining experiments

“…This further excludes treatments where some players 2. Symmetric disagreement values: If bargaining reaches the final round, or if breakdown occurs as in Miller et al (2018), we require that all players receive the same payoff.…”

Collective intertemporal decisions and heterogeneity in groups

“…9 We did not set a fixed endpoint of the coordination mechanism because (i) the decision of where to set the endpoint is arbitrary, and (ii) this would change the strategic nature of the coordination mechanism. For instance, subjects could threaten other group members with deliberate miscoordination in the final round, especially if negotiation-breakdown values vary across group members (e.g., Miller et al, 2018). In that sense, our coordination mechanism is similar to the classic bargaining model by Rubinstein (1982), and its extension to more than two players by Baron and Ferejohn (1989).…”

Collective Intertemporal Decisions and Heterogeneity in Groups

“…We did not set a fixed endpoint of the coordination mechanism because (i) the decision of where to set the endpoint is arbitrary, and (ii) this would change the strategic nature of the coordination mechanism. For instance, subjects could threaten (the) other group member(s) with deliberate miscoordination in the final round, especially if negotiation-breakdown values vary across group members (e.g.,Miller et al, 2018). In that sense, our coordination mechanism is similar to the classic bargaining model byRubinstein (1982), and its extension to more than two players byBaron and Ferejohn (1989).…”

“…While this literature focuses on a different collective decision problem than we do (dividing resources versus taking a collective investment decision), our design resembles different features of the multilateral-bargaining literature. For instance, there are papers that exogenously induce some form of heterogeneity across agents (e.g., by randomly selecting a proposer, or by assigning asymmetric voting power, discount factors, or disagreement values; see Miller et al, 2018, for a discussion), which is similar to our treatments with heterogeneous payoffs from waiting. Furthermore, although most papers focus on simple majority decision rules, some studies investigate bargaining under unanimity rule (e.g., Miller and Vanberg, 2013;Agranov and Tergiman, 2019), which resembles our collective-decision process.…”